Father and son team Hitesh and Anish Parekh combined old-school retail experience with modern expertise to take their store to the next level of convenience.
If it wasn’t for the local community, the newly-renovated Londis in Ashton-under-Lyne probably wouldn’t exist. Five years ago Hitesh Parekh’s Broadoak store in Lancashire, at the time a 500sq ft CTN and post office, was on the verge of closure as part of the Post Office’s cull of outlets, despite doing a thriving trade and providing an invaluable community service. But when the local MP found out the Post Office had earmarked Hitesh’ store for closure, he decided to do something about it.
“My MP David Heyes knew about it the day before I did. He came to me and asked if I’d like him to fight for me. So he got together with the community and local councillors and started a campaign, and 2,500 people signed a petition,” says Hitesh. “It culminated in a meeting at the hotel opposite, which was so busy they had to turn people away. The room was packed with 300 people, including the MP, eight councillors and the Post Office closure team. In the end the Post Office changed its mind.”
Store size: 1,000sq ft
Opening hours: 6am to 8pm Monday to Saturday; 7am to 5pm Sunday
Basket size: £5
Staff: Five full-time
Services: Post office, Lottery, ATM, book lending library
Last year Hitesh vindicated the Post Office’s decision by being named its store of the year, based on performance. But he knew he had to look to the future, which is where a three-pronged attack was devised, involving his son Anish, a store extension and Londis.
Anish, who was working for Kellogg’s at the time, decided to join his father. “We wanted to capitalise on the store’s success and work on the new Post Office model, which requires more focus on the retail side,” he says. Hitesh adds: “The post office was changing, the market was changing, the customers were changing, and we wanted to keep up with it.”
So the pair embarked upon a £200,000 refit, doubling the store size to 1,000sq ft and opting for the support of a symbol group. “We joined Londis to make the supply easier and get the best of promotions and pos, as well as the contact with expertise,” Anish says. “Going from a CTN to a c-store can be difficult as we didn’t have a customer base in terms of the transition. So Londis’ terms fit us the best - they weren’t expecting a certain amount of spend, whereas many of the other symbol groups would have expected quite high orders immediately. It was too risky.”
With the refit finished in March, Anish organised a memorable open day event. The mayor cut the ribbon, a jazz band played outside, a charity raffle raised hundreds of pounds for a local hospice, and he negotiated with key suppliers for samples. “The community felt like we had done something for them; they felt they had helped a local charity, and we had three happy customers who went away with prizes,” Anish says.
The new-look store, equipped with energy-saving refrigeration and lighting, is increasing sales and customers weekly. The main aim at the moment is changing people’s habits by convincing them to switch to a new store, and not just relying on the old post office customers.
Specific focus is on alcohol, groceries and household & personal care. “Those are the three areas we want to address first, as well as the chilled range to an extent,” Anish points out.
Wine sales, which are priced competitively against Tesco and Asda, are doing especially well. “I price our wine for a certain return, but several are now cheaper than Tesco and Asda - up to £1 at regular prices,” he says. “We have a high turnover, if not the best margin, but at the moment we’re trying to get people in and break their habits of going to the supermarket or another local store, and creating a spending habit here.”
Londis selected the wine for the first order, but now Anish takes more control of ordering. “I’m looking into doing wine-tasting courses to gain knowledge. I do pass on tips to customers if I’ve tried the wine, but it’s about having the conversation with the customers; it’s what makes us stand out.”
To stimulate alcohol sales, Anish uses prominent round pound shelf barkers, as well as POS he has created himself. “We get templates on labels and posters from Londis, and we’ll then add a slogan or a message on products. It reminds customers where they’ve seen something on TV - for example, with Stella Cidre, we have a message saying ‘It’s not cider, it’s cidre’.” Other POS encourages cross-merchandising, such as a ‘Don’t forget your bread!’ message next to the eggs, or ‘Perfect with a drink’ on the Sensations crisps, located next to cases of beer.
Focus on chilled
The pair signed a short-term deal with Kerry Foods to supply chilled food, which has proved highly successful. “They put a spring-loaded system into our chiller, which has been brilliant. After just four weeks sales had increased by about seven times. It means the chiller always looks full,” Anish enthuses. The deal is not exclusive, so they can start sourcing chilled from Londis, too.
The pair are keen to embrace anything that increases footfall. The post office, enhanced by the combi counter, has had a “huge impact”, says Hitesh. “Pensioners drawing their pension have been doing larger basket spends due to the convenience of being in a store while drawing their money. Then there are the opportunities for impulse, so I always keep sweets or chocolates at the side of the counter.”
The new external ATM also creates footfall, Hitesh adds. The previous ATM in the old post office charged £1.50. “Now we have a free one through the PO and customers say it’s the best thing, because otherwise they’d have to go half-a-mile away,” he says. “People get their money and come in and spend it.”
It is clear that this father and son team are making a smooth transition from CTN to convenience store, and are successfully adapting to an evolving market. And much of it is down to their unique partnership. “I’ve worked in a convenience store my whole life, but my mentality is of the old school. Anish is part of the new generation; they understand the technology. Also, because he worked for Kellogg’s he knows what the supermarkets and other c-stores are stocking,” Hitesh explains.
Anish agrees that his Kellogg’s background has brought a fresh perspective to the business. “I definitely know about communication and understanding people’s needs,” he says. “A split second of mis-engagement really puts people off. It’s about high-quality service, point of sale and visibility. I always say to staff ‘If you can’t see it you can’t sell it’.”
“My father brings the experience, the safety net,” he adds. “He’s dealt with problems that I haven’t faced before, especially with the post office.”
However, according to Hitesh, his son took to running a shop for the first time with aplomb. “From day one he took all the responsibility, from the shopfitting to organising the store launch. With my experience and his expertise, we can’t go wrong!”
As for the future, the pair intend to roll out more extensive fruit and veg and grocery offerings, as well as introduce more local lines to add to the locally-produced eggs and muffins. “I’d always be open if someone pitches their product to us as it’s another point of difference,” Anish says.
They are also considering introducing a home delivery grocery service for customers located within a half-mile radius, to add to the long-running newspaper delivery service, which caters to 100 customers and “is doing as well as ever”. They already deliver other items to elderly customers on an ad hoc basis.
But for now they are building the customer base and the foundations of a successful convenience store. “It’s about providing the right brands, the right visual merchandising and refreshing the promotions every three weeks. I don’t want anything looking like furniture,” says Anish. “A hint for us that it’s going in the right direction is how often someone’s using a basket. If someone picks one up, I get a little bit excited! And it’s happening more and more.”
After the Post Office’s last-minute U-turn, a councillor suggested that Hitesh offered a local library service. Officially an extension of the council library, customers have a choice of about 250 books. “They just have to sign up and can take a book out for as long as they like,” Hitesh explains. “They even bring in their own books now; all types of people, from pensioners to young people, to the middle classes going on holiday. They love it!
“After the post office campaign, when the council realised how many people used us, they thought ‘let’s provide an extra service in the area’.”